Martin Baxter, executive vice president at Green Man Gaming, talks about the importance of using digital and how the PC gaming sector is now more lucrative than ever.
As with any retailer, adopting an identity within your market, creating a good customer experience and giving people a reason to shop is crucial. More importantly, understanding your market, competitors and customers will determine your success and failure. A big part of that is about studying changes in consumer habits and being prepared to follow.
With over 25 years experience in games retail, I’ve been amazed at how badly large companies have reacted to changes in their markets. Businesses need to be flexible and adapt quickly, especially within a market like gaming that’s predicted to be worth over $100 billion by 2017, and is already more lucrative than Hollywood.
The move from physical to digital within the market has been a lot slower than many predicted, and still falls way behind other entertainment content. I believe as an industry we are finding it hard to break away from physical as quickly as customers would want, as there is a fear if we do – will digital customers pick up the losses on physical revenue enough?
This is a fine balance. If you move quicker than your customers want to, you’ll damage your business, however, if you move too slowly this can have the same impact.
There’s still wariness around digital retail, however, the digital model without doubt fits our industry better than a physical one. Having worked on both sides of the fence, the biggest challenge in physical is the stock holding and cash flow risk to your business.
Lots of publishers are controlling their physical distribution more. Many have stopped making boxed PC games altogether, moving to a download-only model. Producing or ordering too much stock harms both the publisher and retailer, whilst under ordering also has the same effect. This issue is removed in the digital space and the key to success is offering your consumers what you believe in. Never panic into areas that deliver short-term gains at the expense of longer-term strategies.
One of the most pleasing things for me when I moved from High Street games retail to the world of PC digital, was the range of products available digitally that you’d never see in a High Street store.
The state of PC gaming is extremely healthy, more diverse and relevant to the industry than ever before. It’s becoming rare that a core gamer will be loyal and exclusive to just one platform or device; PC now has the broader audience and I see huge development opportunities and innovation in PC gaming.
To see small indie titles generate significant revenues with a product that would never see the light of day in a store makes me happy; digital is the only real way indie games can be discovered and for me that’s what it’s all about.